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Obama budget to focus on debt reduction

President Obama's budget proposal next week will include debt reduction offers previously made to congressional Republicans, including structural changes that would limit the growth of Social Security, officials said Friday.

President Obama's budget proposal next week will include debt reduction offers previously made to congressional Republicans, including structural changes that would limit the growth of Social Security, officials said Friday.

The officials also said that Obama will not ultimately sign off on many of these cuts — including one that would change the way Social Security cost-of-living increases are calculated — unless congressional Republicans agree to new tax revenues by closing loopholes for the wealthy.

"The president believes we need a broad, balanced approach to our nation's fiscal challenges," White House spokesman Jay Carney said.

Carney said the plan, including changes to Social Security, "is not the president's ideal approach ... but it is a serious compromise proposal."

Republicans have said they will oppose any new tax hikes as part of debt reduction.

Obama is scheduled to unveil his proposed budget on Wednesday; two officials discussed his plans in detail on the condition they not be named because the document has not been released.

The proposed budget would reduce the debt by $1.8 trillion over 10 years, they said, adding to $2.5 trillion in reductions achieved through previous budget deals. If the president's budget is adopted, they said, the budget deficit would be 2.8% of gross domestic product by the year 2016, and 1.7% by 2023.

The current federal debt exceeds $16.7 trillion.

Many of the cuts to be included in the Obama budget were offered to House Speaker John Boehner last year as part of negotiations to avoid the so-called "fiscal cliff."

The Social Security proposal is known as "chained CPI"; the acronym stands for Consumer Price Index.

In describing the plan as a compromise offer to the Republicans, Carney and other White House officials noted that fellow Democrats have criticized the proposed Social Security changes and other cuts.

Boehner criticized Obama's budget outline, which will be released in full April 10, because the president continues to seek additional revenues by closing tax loopholes that benefit the wealthy in exchange for these entitlement reforms.

Republicans oppose any additional tax increases after the January budget deal that raised more than $600 billion in new taxes. However, most Republicans support the entitlement reforms the White House discussed Friday.

"When the president visited the Capitol last month, House Republicans stated a desire to find common ground and urged him not to make savings we agree upon conditional on another round of tax increases," Boehner said in a statement. "If reports are accurate, the president has not heeded that call."

Congressional Democrats were largely silent on the White House budget early Friday, but outside liberal activists groups moved swiftly to condemn the entitlement proposals backed by the president.

"You can't call yourself a Democrat and support Social Security benefit cuts," said Stephanie Taylor of the Progressive Change Campaign Committee. The group has signed over 100 Democratic lawmakers to a letter opposing any cuts to Social Security, Medicare or Medicaid benefits.

AFL-CIO President Richard Trumka tweeted that any budget that includes benefit cuts "is a sign of the wrong-headed policy driving our slow recovery." A spokesman for Senate Majority Leader Harry Reid, D-Nev., said the senator would not be commenting on the president's budget today.